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Question - To increase sales, Blue Spruce Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with one loyalty point for every $25 of merchandise purchased. Each point is redeemable for a $3 discount on any purchases of Blue Spruce merchandise in the next three years. After the program launched, during 2020, customers bought merchandise for $262,500 (all products are sold to provide a 40% gross profit) and earned 10,500 points redeemable for future purchases. The stand-alone selling price of the merchandise sold is $262,500. Based on prior experience with incentive programs like this, Blue Spruceexpects 7,900 points to be redeemed related to these sales.
Required - Prepare the journal entries for cash sales including the issuance of loyalty points for Blue Spruce in 2020.
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